Following a series of meetings in Taiwan with original equipment manufacturers (OEMs) and OEM suppliers, Canaccord Genuity semiconductor analyst Bobby Burleson expressed confidence in near term PC production and smartphone demand. Mr. Burleson said:
“Our meetings in Taiwan last week were particularly constructive on PCs and smartphones, with the former seeing better than seasonal trends as HDD [Hard Disk Drive] supply eases and smartphones benefiting from a shift away from feature phones in the emerging markets.”
Regarding the smartphone sector he added, “Meetings with wireless food chain participants tended to focus on the meaningful shift toward low cost smartphones in the domestic Chinese and export handset markets. Feature phones, an over 500M unit market in 2011, are expected to decline at least 5% in 2012. Conversely, smartphones in China should grow from their 50-60 million units in 2011 to well over 150 million (wide ranges were forecasted) in 2012, driven in large part by a rapid rollout of models from local OEMs.”
Companies he was most positive on following the trip were:
Advanced Micro Devices (AMD : NYSE) – “In our view, better execution is likely to deliver on previous expectations of share gains in mainstream notebook and server. We also see more consistent free cash flow generation going forward, allowing for further improvements to the balance sheet.”
Broadcom Corporation (BRCM : NASDAQ) – “We see shares of Broadcom moving higher on strength at key Mobile & Wireless customers, resumption of growth for Infrastructure & Networking following inventory digestion and spending delays, and a more constructive stance on dividends.”
Integrated Device Technology (IDTI : NASDAQ) – “We believe upside . . . could come from server memory interface and wireless infrastructure over the next few quarters.”
Intel Corporation (INTC : NASDAQ) – “In our view, ultrabooks won’t stimulate consumer demand until price points come down and touch is featured at mainstream price points with the ramp of Win8 in late 2012.”
Intersil Corporation (ISIL : NASDAQ) – “Guidance appears conservative for Q1 in our view, considering our recent checks showing better than seasonal demand for PC power management.”
Marvell Technology Group (MRVL : NASDAQ) – “We expect revenue and earnings growth to outstrip the broader semiconductor market in 2012, based on a recovery for the company’s core HDD business, rising demand for TD-SCDMA smartphones, and a shift to merchant SSD controllers that should favor MRVL’s technology leadership.”
